Wednesday, November 28, 2007

Okay, I need to work on that title, but here's the gist:If we agree that health insurance has more in common with Property/Casualty than Life insurance, then perhaps we can learn a lesson from our friends in the Sunshine State:

And that's worked out pretty well: Citizens is now the biggest writer of property insurance in Florida, eclipsing even our friends The Good Neighbors.

In fact, Citizen's has become so successful that it currently has over $400 billion (yes, billion with a "b") in liabilities.Which is only a problem insofar as it's currently collected something like $3 billion in premiums.

Ooops.

But that's not really a problem, you see, because -- worst case scenario -- if there is a devastating storm that wipes out Citizens' (and you just have to love the irony of that name here) meager assets, all they have to do is go back to the actual citizens (note the lower case "c") and make them pony up.They can do that, you see, because they've got the power of the government behind them.

Sweet.

Until you start calculating the costs: "Andrew, in 1992, caused $23 billion in damage," or about 7 years worth of premiums. And that was 1992 dollars. Do the math.

Now, what does this have to do with health insurance? Well, it seems to me that this P&C scheme quite accurately models what we've seen proposed in the way of gummint-run health insurance (and please note the very purposefully chosen terms). That is, the government decides what's (and who's) covered, sets the premiums, and (if they're too low), comes back for more (see Bob's post below). With the power of the federal government.And what happens if (or when) there's a major problem (MRSA, anyone?)?

Okay, I need to work on that title, but here's the gist:If we agree that health insurance has more in common with Property/Casualty than Life insurance, then perhaps we can learn a lesson from our friends in the Sunshine State:

And that's worked out pretty well: Citizens is now the biggest writer of property insurance in Florida, eclipsing even our friends The Good Neighbors.

In fact, Citizen's has become so successful that it currently has over $400 billion (yes, billion with a "b") in liabilities.Which is only a problem insofar as it's currently collected something like $3 billion in premiums.

Ooops.

But that's not really a problem, you see, because -- worst case scenario -- if there is a devastating storm that wipes out Citizens' (and you just have to love the irony of that name here) meager assets, all they have to do is go back to the actual citizens (note the lower case "c") and make them pony up.They can do that, you see, because they've got the power of the government behind them.

Sweet.

Until you start calculating the costs: "Andrew, in 1992, caused $23 billion in damage," or about 7 years worth of premiums. And that was 1992 dollars. Do the math.

Now, what does this have to do with health insurance? Well, it seems to me that this P&C scheme quite accurately models what we've seen proposed in the way of gummint-run health insurance (and please note the very purposefully chosen terms). That is, the government decides what's (and who's) covered, sets the premiums, and (if they're too low), comes back for more (see Bob's post below). With the power of the federal government.And what happens if (or when) there's a major problem (MRSA, anyone?)?